Royal returns for Morrisons

May 6, 2011

Retailers profited heavily from the royal wedding, as was expected, in particular the Bradford-based supermarket Morrisons.

Chief executive, Dalton Phillips, said that the Thursday prior to Easter and the Thursday before the royal wedding were “up there” with the Christmas period in terms of business.

Citing the hot weather as part of the influx of customers, Phillips said: “People just wanted to get out to picnic and party,” he was also keen on boasting that the bunting used for the Downing Street royal wedding came from Morrisons.

Let’s get down to the all-important figures then; total sales over the 13 weeks leading to May 1st rose by 4.2pc, with the exclusion of fuel. Like-for-like sales far exceeded City forecasts, growing by 2.5pc. Analysts at Bank of America Merrill Lynch said that Morrisons has delivered a “royal flush”.

The bank continued to make royalty-related puns, calling it “a strong quarter with a regal finish”.

Over what was a successful period for Morrisons, they claimed to have sold 150 miles of bunting and 200,000 cupcakes – and it’s good to see we’re all being a bit more environmentally friendly and not littering parks, as they reported a 30pc increase in sales of bin bags.

Phillips however, was a bit of a killjoy and stated that although the period was a breathe of fresh air, it’s unlikely to last. “Consumer confidence is down and I don’t see it picking up anytime soon. I don’t see any respite for the rest of the year,” he explained.

As for the future of Morrisons, like other big supermarket chains, they will be launching an internet home shopping business – and have applied for UK trademarks for the “Fresh Direct” name, after the New York company of the same name who Morissons own a 10pc stake in.

Objections have been made however, an existing company based in Bicester already operates under the name Fresh Direct.

David Burns, managing director of the Bicester Fresh Direct, has voiced his concerns, stating he does have “a problem” with Morrisons applying for the name. Phillips has responded saying that it’s still “early days” and although there will be an online service; they are yet to decide on a name.

So all in all it’s been a good period for Morissons, and most retailers in general will have profited from Kate and Wills’ wedding, onto the next royal I say!

In other news…

Next also reported better than expected first quarter sales figures, with sales from its stores and catalogue rising by 5.2pc between the start of February and April.

They also had the royal wedding and Easter break to thank for the impressive sales figures. As a result, the retailer said it now expects pre-tax profits to be more in the region of £535m and £585m, £15m more than what was predicted back in March!

However, it’s not all-good news for consumers, as they also warn that prices were likely to rise by 8% in the second half of the year, due to the rising cost of raw materials.